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Buying a car online vs in person at a dealership

Negotiating face to face or surfing the web: Should you buy a car online or at the dealership?

Part of buying a new car is deciding where to shop for it. You can visit a dealership in person to test drive vehicles and negotiate face to face. You can also choose an at-home experience by buying a car through an online automotive marketplace or online dealer. This guide covers all 3 options in detail, so you can make the best choice for your personal situation.

Online dealer vs online automotive marketplace vs in-person dealership

FeatureOnline dealerOnline automotive marketplaceIn-person dealership
Examples
  • Clutch, Canada Drives, CarDoor, Carooga
  • AutoTrader, Carpages
  • Local dealers near you
Prices
  • Cheaper than in-person dealerships due to lower operating costs
  • Non-negotiable prices
  • Cheaper than online and in-person dealers if the cars are older
  • Negotiable prices
  • Potentially more expensive than online dealers and marketplaces
  • Negotiable prices
Inventory
  • Used cars only, typically newer than 2013
  • Usually hundreds to thousands of cars to choose from
  • All on one webpage
  • New and used cars
  • Thousands of cars to pick from
  • Includes dealer and private seller vehicles
  • New and used cars
  • Hundreds of cars to pick from
  • Inventory is with the dealer or other dealers it’s partnered with
Buying process
  • Convenient, hassle-free, completely online
  • Time-consuming, partially online
  • Visit and test drive in-person, can see inventory online in some cases
Trial period
  • Varies by dealer, usually 7–14 days
  • No trial period unless specified by seller, but test drives allowed
  • No trial period unless specified by dealer, but test drives allowed
Financing
  • In-house financing, bank loans and private loans
  • In-house financing, bank loans and private loans
  • In-house financing, bank loans and private loans
Extra features
  • Buying process is completely online
  • At-home delivery
  • Pricing guidance
  • Buy from home options
  • In-person test drives
  • No online interactions required

Pros and cons of buying a car online vs at a dealership

Consider the following pros and cons when buying a car from an online dealer vs an online automotive marketplace vs an in-person dealer.

ProsCons
Buying a car from an online dealer
  • Online buying process. Buy a used vehicle with online payment and at-home delivery.
  • Trial period. Get 7-14 days to test your vehicle out.
  • Quick approval. Get financing in under 24 hours in many cases.
  • Newer vehicles only. Most vehicles are 2013 or newer (so may cost more).
  • Non-negotiable prices. You can’t negotiate since prices are fixed.
  • No test drives. You can’t test drive multiple vehicles before you buy.
Buying a car from an online automotive marketplace
  • Large inventory. Shop from thousands of vehicles from private sellers and dealers.
  • Negotiable prices. Request a lower price and see if the seller will bite.
  • Compare prices. Compare multiple offers on the same make and model to get the best deal.
  • Takes longer. You’ll need to send multiple messages and there may be more competition for vehicles.
  • Potential for fraudulent sellers. You might end up running into a scam or fraudulent seller online.
  • No trial period. You usually won’t get a trial period to make sure you like the vehicle.
Buying a car at an in-person dealership
  • Multiple test drives. Test drive multiple vehicles on one site.
  • In-person inspection. Physically inspect the vehicle yourself to make sure there’s no cosmetic damage.
  • Dealership financing. Dealers often have a variety of financing options that you can apply for when you buy a car.
  • Can be overpriced. Some dealers inflate the selling price and only negotiate down if you’re skilled at haggling.
  • Pressure to buy. Salespeople can use dodgy tactics and sales techniques to get you to buy a vehicle quickly.
  • Must go in person. You’ll need to show up in person and there’s no guarantee the car you want will be on site.

When to buy a car online

You’ll usually want to buy a car online in the following circumstances:

  • You want a specific make and model. You may want to shop online if you’re looking for a specific type of car since it may not be available from a local dealer.
  • You’re looking to compare prices. Buying a car online lets you compare prices for similar vehicles. You can shop across large inventories with multiple providers to make sure you’re getting the best deal.
  • You want a hassle-free experience. Shopping with an online dealer lets you pick a car, pay for it online and get it delivered directly to your doorstep. There’s no need to leave your house or deal with pushy salespeople.
  • You don’t need to test drive. You’ll get a trial period to try out your new car with an online dealer, but there are no test drives. You can usually go in person to test drive if you shop with an online automotive marketplace.

When to buy a car at a dealership

You may want to buy a car at a dealership in the following situations:

  • You want to shop in person. Shopping in person lets you kick the tires and inspect vehicles with your own eyes. You can also ask the dealer questions in real-time and apply for in-house financing if you can’t afford to pay in cash.
  • You’d like to test drive multiple cars. You’ll be able to test drive multiple cars on a single lot to find the best fit for you. This means you can get a good feel for how a car drives before you buy (unlike with online purchases).
  • You don’t mind working with a salesperson. Salespeople can be extremely helpful, but they can also be pushy when they want to make a sale. You’ll want to make sure that you know how much you’re willing to pay and how to haggle on prices before you head to the dealership.
  • You want to drive home on the same day. Dealers typically want to make a quick sale to move their inventory off the lot. This means they’ll work hard to get you into a vehicle and to drive home on the same day you visit, with affordable in-house financing if you qualify.

Where can I buy a car online?

The benefits of shopping for a car online can vary based on the website you’re using. Each one is different, and one might suit your needs more than another. Here are some sites to get you started on your journey towards finding the right vehicle:

Online dealers

Canada Drives

  • Large inventory
  • Newer used cars only
  • Trial period of 7 days/500 km
  • Available in select provinces only
Clutch logo

Clutch

  • Large inventory
  • Newer used cars only
  • Trial period of 10 days/750 km
  • Vehicles get 210-point inspection
  • Special promotions
  • Not available in Quebec or Manitoba

Go to site

CarDoor

  • 360-degree online walkaround virtual tours
  • Newer used cars only
  • 14-day trial period
  • 90-day warranty
  • Only available in Ontario
Carooga logo

Carooga

  • Smaller inventory of cars
  • Newer used cars only
  • 7-day trial period
  • 90-day warranty
  • Only available in Western provinces
Get a more complete list of online dealers here
Online automotive marketplace
AutoTrader logo

AutoTrader.ca

  • Large inventory
  • Pricing guidance (identifies poor, fair, good and great prices)
  • At-home delivery options
  • Mobile app
Carpages logo

Carpages.ca

  • Quality control mechanism to block scammers
  • Only allows licensed dealers and verified individuals to sell cars
  • Geo-targeting software generates local results
  • Mobile app
Kijiji Autos logo

Kijiji Autos

  • User-friendly site
  • Mostly private sales but some dealers
  • Pricing guidance (identifies poor, fair, good and great prices)
  • Mobile app
Unhaggle

Unhaggle.com

  • Multiple dealers compete to give you the lowest price
  • Free factory invoice price reports
  • National network of certified dealers

Steps to buying a car online vs a dealership

Follow these steps to buy a car online or with an in-person dealer:

Steps to buying a car online

  1. Figure out your budget. Compare cars of the same make, model and year to figure out how much you should pay. Start with sites like Canadian Black Book and CARFAX to get average car prices. Learn more about how much car you can afford.
  2. Pick a seller and filter your search. Decide if you want to shop with an online car dealer or automotive marketplace. Explore the online inventory for the seller you choose to find vehicles you’re interested in.
  3. Decide how to pay for your car. Pay with savings or apply for financing with your seller. Most online dealers offer in-house financing options, along with some automotive marketplaces. Find a car loan that meets your needs.
  4. Pay for your car. You’ll pay for your car online using a credit card or regular online banking withdrawals with an online dealer. You can typically pay in person with cash, online banking or an Interac e-Transfer with an online automotive marketplace.
  5. Figure out delivery or pick up your vehicle. If you’ve ordered your car completely online, you’ll usually need to arrange for delivery. If you purchased a car from an automotive marketplace, you can typically drive it away once you pay.
  6. Get registered and insured. Find out the requirements to get registered and insured in your province. This will usually be done for you if you sign up with an online dealer.

Steps to buying a car with a dealer

  1. Decide how much you’re willing to pay. Make a budget and figure out exactly how much you want to pay. Stick to this number when haggling with the dealer to make sure you don’t pay more than you can afford.
  2. Find a local dealer with solid reviews. Search for local dealers and compare reviews to make sure you pick a trustworthy company. Your best bet is to visit 3-4 dealerships before deciding on a car to make sure you get the best deal.
  3. Explore the online inventory if available. See if you can find an online inventory for the dealer you’re interested in. This will help you figure out if there’s a vehicle you’re interested in before you visit in person.
  4. Visit the dealer in person. Visit the dealer and ask for a salesperson to assist you. Give your dealer your specifications and they will show you different vehicles and help you decide which ones you want to test drive.
  5. Pay for your car. Select the car you’re interested in and pay for it with cash or apply for in-house financing.
  6. Drive off the lot. The dealer will usually help you set up your insurance and registration on the spot, so you can drive home that day.

Should I get financing from the dealership or an online lender?

How online auto financing works

You can apply for financing through an online lender with a simple 5- to 10-minute application in most cases. Apply for car loan pre-approval with a few different lenders to find the one that offers the best rates. Then, you can choose to take that financing to pay for your vehicle or use your pre-approval to negotiate a lower rate with your online or in-person dealer.

In most cases, you won’t be able to use online auto financing to buy a car from a private seller. You may also have issues qualifying if you have bad credit.

Compare car loans you can apply for online

1 - 8 of 8
Name Product Loan Amount Interest Rate Loan Term Min. Credit Score Requirements
CarsFast Car Loans
$500 - $75,000
4.90% - 29.90%
12 - 96 months
300
Min. income of $2,000 /month, 3+ months employed
Get a new or used vehicle delivered to your door.
Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs.
Loans Canada Car Loans
$500 - $35,000
0% - 31.99%
24 - 120 months
300
Min. income of $1,800 /month, 3+ months employed
Compare rates from 60+ lenders.
Complete a single application to get quotes from different lenders. Bad credit, CERB and EI borrowers considered. 0% APR for new cars only, used car rates start at 7.99%.
Coast Capital Car Loan
Varies
Varies
18 - 84 months
650
Able to service debt payment of $300/month
Competitive rates and flexible terms.
Finance new and used vehicles from one of Canada's largest credit unions. No credit union membership required. Available across Canada except SK, QC, NT, NU, YT.
goPeer Car Loans
$1,000 - $25,000
8.00% - 31.00%
36 - 60 months
600
Min. income of $40,000 /year
P2P platform with competitive rates.
Canada's first regulated consumer peer-to-peer lending platform that connects creditworthy Canadians looking for a loan with Canadians looking to invest.
Clutch Car Loans
$7,500 - No max.
From 3.90%
12 - 96 months
580
3+ months employed, Max.1 bankruptcy
Pre-qualify for a loan in under 2 minutes with no impact to your credit score.
Get approved for financing in under 24 hours for the used car you want. No hidden fees. Get the vehicle delivered to your door.
Carloans411 Car Loans
$500 - $50,000
1.90% - 19.99%
Up to 72 months
300
Min. income of $1,600 /month, 3+ months employed
High application approval rate.
Get connected with suitable lenders to finance your next car, van or truck. Check eligibility for this loan through LoanConnect.
Canada Auto Finance
$500 - $45,000
4.90% - 29.95%
3 - 96 months
300
Min. income of $1,500 /month, 3+ months employed
Get financing from partnered local lenders.
Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.
Splash Auto Finance
$5,000 - $50,000
9.90% - 31.00%
24 - 84 months
300
Min. income of $2,200 /month, 3+ months employed
Apply with any credit score.
Get financing for a new or used car. Auto loans for borrowers with fair credit, bad credit, no credit or bankruptcy.
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Compare up to 4 providers

How dealership financing works

Car dealerships often work with lending institutions or use their own money to give you in-house financing. It’s possible to get a good deal from a dealership in Canada because they want to lock in a quick sale, and some dealers get a preferred rate from banks for giving them a high volume of applications.

To find the best deal, you may want to consider pre-qualifying for financing with an online lender so you know how much you should be paying. You can use this to negotiate your rate down if the dealer offers you a higher rate. You’ll get approved fairly quickly with a dealer and you can drive off the lot on the same day you start shopping in most cases.

How does auto financing impact my credit score?

Most pre-approval car loan quotes will only do soft pulls on your credit, which doesn’t impact your credit score at all. When you actually submit an application for a car loan, whether online or at a dealership, the loan issuer will do a hard pull on your credit, which will temporarily drop your credit score.

After the first pull, your credit score won’t continue to go down if you allow multiple hard pulls for the same type of loan within a certain time frame (typically from 14 to 45 days). Credit bureaus don’t penalize you for shopping around for the best rate because it proves you’re trying to be a responsible borrower.

Frequently asked questions

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